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Debt securities available-for-sale | 12 Months Ended
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Dec. 31, 2018
Debt securities available-for-sale |
Debt Securities, Available-for-sale |
Investments in debt and marketable equity securities | Note 6 – Debt securities available-for-sale T he following table s present the amortized cost, gross unrealized gains and losses, approximate fair value, weighted average yield and contractual maturities of debt securities available-for-sale at December 31, 2018 and 2017
|  | At December 31, 2018 |
|  |  |  | Gross | Gross |  |  | Weighted |
|  | Amortized | unrealized | unrealized | Fair | average |
(In thousands) | cost | gains | losses | value | yield |
U.S. Treasury securities |  |  |  |  |  |  |  |  |  |
| Within 1 year | $ | 3,565,571 | $ | 108 | $ | 5,319 | $ | 3,560,360 | 2.10 | %
| After 1 to 5 years |  | 4,483,741 |  | 13,647 |  | 35,213 |  | 4,462,175 | 2.25 |
| After 5 to 10 years |  | 245,891 |  | 3,770 |  | - |  | 249,661 | 2.84 |
Total U.S. Treasury securities |  | 8,295,203 |  | 17,525 |  | 40,532 |  | 8,272,196 | 2.21 |
Obligations of U.S. Government sponsored entities |  |  |  |  |  |  |  |  |  |
| Within 1 year |  | 212,951 |  | - |  | 1,406 |  | 211,545 | 1.44 |
| After 1 to 5 years |  | 123,857 |  | 1 |  | 2,094 |  | 121,764 | 1.51 |
Total obligations of U.S. Government sponsored entities |  | 336,808 |  | 1 |  | 3,500 |  | 333,309 | 1.47 |
Obligations of Puerto Rico, States and political subdivisions |  |  |  |  |  |  |  |  |  |
| After 1 to 5 years |  | 6,926 |  | - |  | 184 |  | 6,742 | 0.70 |
Total obligations of Puerto Rico, States and political subdivisions |  | 6,926 |  | - |  | 184 |  | 6,742 | 0.70 |
Collateralized mortgage obligations - federal agencies |  |  |  |  |  |  |  |  |  |
| After 1 to 5 years |  | 749 |  | - |  | 7 |  | 742 | 1.92 |
| After 5 to 10 years |  | 115,744 |  | 1 |  | 4,715 |  | 111,030 | 1.71 |
| After 10 years |  | 638,995 |  | 1,584 |  | 23,680 |  | 616,899 | 2.10 |
Total collateralized mortgage obligations - federal agencies |  | 755,488 |  | 1,585 |  | 28,402 |  | 728,671 | 2.04 |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |
| Within 1 year |  | 431 |  | 4 |  | - |  | 435 | 4.30 |
| After 1 to 5 years |  | 6,762 |  | 43 |  | 1 |  | 6,804 | 2.74 |
| After 5 to 10 years |  | 365,727 |  | 1,090 |  | 8,499 |  | 358,318 | 2.19 |
| After 10 years |  | 3,710,731 |  | 10,679 |  | 128,189 |  | 3,593,221 | 2.45 |
Total mortgage-backed securities |  | 4,083,651 |  | 11,816 |  | 136,689 |  | 3,958,778 | 2.43 |
Other |  |  |  |  |  |  |  |  |  |
| After 5 to 10 years |  | 486 |  | 2 |  | - |  | 488 | 3.62 |
Total other |  | 486 |  | 2 |  | - |  | 488 | 3.62 |
Total debt securities available-for-sale[1] | $ | 13,478,562 | $ | 30,929 | $ | 209,307 | $ | 13,300,184 | 2.25 | %
[1] Includes $8.9 billion pledged to secure public and trust deposits, assets sold under agreements to repurchase, credit facilities and loan servicing agreements that the secured parties are not permitted to sell or repledge the collateral, of which $7.9 billion serve as collateral for public funds.
|  | At December 31, 2017 |
|  |  |  | Gross | Gross |  |  | Weighted |
|  | Amortized | unrealized | unrealized | Fair | average |
(In thousands) | cost | gains | losses | value | yield |
U.S. Treasury securities |  |  |  |  |  |  |  |  |  |
| Within 1 year | $ | 1,112,791 | $ | 8 | $ | 2,101 | $ | 1,110,698 | 1.06 | %
| After 1 to 5 years |  | 2,550,116 |  | - |  | 26,319 |  | 2,523,797 | 1.55 |
| After 5 to 10 years |  | 293,579 |  | 281 |  | 191 |  | 293,669 | 2.24 |
Total U.S. Treasury securities |  | 3,956,486 |  | 289 |  | 28,611 |  | 3,928,164 | 1.46 |
Obligations of U.S. Government sponsored entities |  |  |  |  |  |  |  |  |  |
| Within 1 year |  | 276,304 |  | 21 |  | 818 |  | 275,507 | 1.26 |
| After 1 to 5 years |  | 336,922 |  | 22 |  | 3,518 |  | 333,426 | 1.48 |
Total obligations of U.S. Government sponsored entities |  | 613,226 |  | 43 |  | 4,336 |  | 608,933 | 1.38 |
Obligations of Puerto Rico, States and political subdivisions |  |  |  |  |  |  |  |  |  |
| After 1 to 5 years |  | 6,668 |  | - |  | 59 |  | 6,609 | 2.30 |
Total obligations of Puerto Rico, States and political subdivisions |  | 6,668 |  | - |  | 59 |  | 6,609 | 2.30 |
Collateralized mortgage obligations - federal agencies |  |  |  |  |  |  |  |  |  |
| Within 1 year |  | 40 |  | - |  | - |  | 40 | 2.60 |
| After 1 to 5 years |  | 16,972 |  | 173 |  | 75 |  | 17,070 | 2.90 |
| After 5 to 10 years |  | 36,186 |  | 57 |  | 526 |  | 35,717 | 2.31 |
| After 10 years |  | 914,568 |  | 2,789 |  | 26,431 |  | 890,926 | 2.01 |
Total collateralized mortgage obligations - federal agencies |  | 967,766 |  | 3,019 |  | 27,032 |  | 943,753 | 2.03 |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |
| Within 1 year |  | 484 |  | 8 |  | - |  | 492 | 4.23 |
| After 1 to 5 years |  | 14,599 |  | 206 |  | 211 |  | 14,594 | 3.50 |
| After 5 to 10 years |  | 339,161 |  | 2,390 |  | 3,765 |  | 337,786 | 2.21 |
| After 10 years |  | 4,385,368 |  | 19,493 |  | 69,071 |  | 4,335,790 | 2.46 |
Total mortgage-backed securities |  | 4,739,612 |  | 22,097 |  | 73,047 |  | 4,688,662 | 2.44 |
Other |  |  |  |  |  |  |  |  |  |
| After 5 to 10 years |  | 789 |  | 13 |  | - |  | 802 | 3.62 |
Total other |  | 789 |  | 13 |  | - |  | 802 | 3.62 |
Total debt securities available-for-sale[1] | $ | 10,284,547 | $ | 25,461 | $ | 133,085 | $ | 10,176,923 | 1.96 | %
[1] Includes $6.6 billion pledged to secure public and trust deposits, assets sold under agreements to repurchase, credit facilities and loan servicing agreements that the secured parties are not permitted to sell or repledge the collateral, of which $5.6 billion serve as collateral for public funds.
The weighted average yield on debt securities available-for-sale is based on amortized cost; therefore, it does not give effect to changes in fair value. Securities not due on a single contractual maturity date, such as mortgage-backed securities and collateralized mortgage obligations, are classified in the period of final contractual maturity. The expected maturities of collateralized mortgage obligations, mortgage-backed securities and certain other securities may differ from their contractual matur ities because they may be subject to prepayments or may be called by the issuer. The following table presents the aggregate amortized cost and fair value of debt securities available-fo r-sale at December 31, 2018 by contractual maturity.
(In thousands) |  | Amortized cost |  | Fair value
Within 1 year | $ | 3,778,953 | $ | 3,772,340
After 1 to 5 years |  | 4,622,035 |  | 4,598,227
After 5 to 10 years |  | 727,848 |  | 719,497
After 10 years |  | 4,349,726 |  | 4,210,120
Total debt securities available-for-sale | $ | 13,478,562 | $ | 13,300,184
There were no debt securities sold during the year ended December 31, 2018. During the year ended December 31, 2017, the Corporation sold obligations from the Puerto Rico government and its political subdivisions. The proceeds from these sales were $14.4 million. Gross realized gains and losses on the sale of debt securities available-for-sale for the years ended December 31, 2018, 2017 and 2016 were as follows:
| Years ended December 31,
(In thousands) |  | 2018 |  | 2017 |  | 2016
Gross realized gains | $ | - | $ | 95 | $ | 38
Gross realized losses |  | - |  | (12) |  | -
Net realized gains on sale of debt securities available-for-sale | $ | - | $ | 83 | $ | 38
The following tables present the Corporation’s fair value and gross unrealized losses of debt securities available-for-sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2018 and 2017.
|  | At December 31, 2018
| Less than 12 months | 12 months or more | Total
|  |  |  | Gross |  |  | Gross |  |  | Gross
|  | Fair | unrealized | Fair | unrealized | Fair | unrealized
(In thousands) | value | losses | value | losses | value | losses
U.S. Treasury securities | $ | 3,189,007 | $ | 4,188 | $ | 2,607,276 | $ | 36,343 | $ | 5,796,283 | $ | 40,531
Obligations of U.S. Government sponsored entities |  | 14,847 |  | 46 |  | 318,271 |  | 3,454 |  | 333,118 |  | 3,500
Obligations of Puerto Rico, States and political |  |  |  |  |  |  |  |  |  |  |  |
| subdivisions |  | - |  | - |  | 6,742 |  | 184 |  | 6,742 |  | 184
Collateralized mortgage obligations - federal agencies |  | 66,652 |  | 489 |  | 587,869 |  | 27,913 |  | 654,521 |  | 28,402
Mortgage-backed securities |  | 125,872 |  | 2,280 |  | 3,478,635 |  | 134,410 |  | 3,604,507 |  | 136,690
Total debt securities available-for-sale in an |  |  |  |  |  |  |  |  |  |  |  |
| unrealized loss position | $ | 3,396,378 | $ | 7,003 | $ | 6,998,793 | $ | 202,304 | $ | 10,395,171 | $ | 209,307
|  | At December 31, 2017
| Less than 12 months | 12 months or more | Total
|  |  |  | Gross |  |  | Gross |  |  | Gross
|  | Fair | unrealized | Fair | unrealized | Fair | unrealized
(In thousands) | value | losses | value | losses | value | losses
U.S. Treasury securities | $ | 2,608,473 | $ | 14,749 | $ | 1,027,066 | $ | 13,862 | $ | 3,635,539 | $ | 28,611
Obligations of U.S. Government sponsored entities |  | 214,670 |  | 1,108 |  | 376,807 |  | 3,228 |  | 591,477 |  | 4,336
Obligations of Puerto Rico, States and political |  |  |  |  |  |  |  |  |  |  |  |
| subdivisions |  | 6,609 |  | 59 |  | - |  | - |  | 6,609 |  | 59
Collateralized mortgage obligations - federal agencies |  | 153,336 |  | 2,110 |  | 595,339 |  | 24,922 |  | 748,675 |  | 27,032
Mortgage-backed securities |  | 1,515,295 |  | 12,529 |  | 2,652,359 |  | 60,518 |  | 4,167,654 |  | 73,047
Total debt securities available-for-sale in an |  |  |  |  |  |  |  |  |  |  |  |
| unrealized loss position | $ | 4,498,383 | $ | 30,555 | $ | 4,651,571 | $ | 102,530 | $ | 9,149,954 | $ | 133,085
As of December 31, 2018, the portfolio of available-for-sale debt securities reflects gross unrealized losses of approximately $209 million, driven mainly by mortgage-backed securities, U.S. Treasury securities and collateralized mortgage obligations. Management evaluates debt securities for other-than-temporary (“OTTI”) declines in fair value on a quarterly basis. Once a decline in value is determined to be other-than-temporary, the value of a debt security is reduced and a corresponding charge to earnings is recognized for anticipated credit losses. The OTTI analysis requires management to consider various factors, which include, but are not limited to: (1) the length of time and the extent to which fair value has been less than the amortized cost basis, (2) the financial condition of the issuer or issuers, (3) actual collateral attributes, (4) the payment structure of the debt security and the likelihood of the issuer being able to make payments, (5) any rating changes by a rating agency, (6) adverse conditions specifically related to the security, industry, or a geographic area, and (7) management’s intent to sell the debt security or whether it is more lik ely than not that the Corporation would be required to sell the debt security before a forecasted recovery occurs. At December 31, 2018, management performed its quarterly analysis of all debt securities in an unrealized loss position. Based on the analysis performed, management concluded that no individual debt security was other-than-temporarily impaired as of such date. At December 31, 2018, the Corporation did not have the intent to sell debt securities in an unrealized loss position and it was no t more likely than not that the Corporation would have to sell the debt securities prior to recovery of their amortized cost basis. The following table states the name of issuers, and the aggregate amortized cost and fair value of the debt securities of such issuer (includes available-for-sale and held-to-maturity debt securities), in which the aggregate amortized cost of such securities exceeds 10% of stockholders’ equity. This information excludes debt securities backed by the full faith and credit of t he U.S. Government. Investments in obligations issued by a state of the U.S. and its political subdivisions and agencies, which are payable and secured by the same source of revenue or taxing authority, other than the U.S. Government, are considered securi ties of a single issuer.
|  | 2018 |  | 2017
(In thousands) | Amortized cost | Fair value | Amortized cost | Fair value
FNMA | $ | 2,999,110 | $ | 2,901,904 | $ | 3,621,537 | $ | 3,572,474
Freddie Mac |  | 1,095,855 |  | 1,058,013 |  | 1,358,708 |  | 1,335,685

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